Britain is stuck in a doom loop: the system is rigged against growth. That needs to change | Will Hutton
The British corporate sector is dying in front of our eyes. Corporate decay and the lifelessness of our stock market, now ranking a mere 10th in the world, affects everything: jobs, careers, good wages, pensions, tax revenues and vibrant public services. Worse, Britain is rich in the research and intellectual knowledge on which successful 21st-century economies will be founded: the opportunity is being squandered. Decisively addressing what is happening must be at the forefront of the 2024 electoral debate.
What needs fixing is the financial doom loop in which our publicly listed companies are locked. Britain has organised its savings system not to support British company formation and growth. In essence our pension funds, the single most important way we save collectively and a source of finance for business, have been set up so that increasingly the risk" of investing in British companies has been avoided or not undertaken at all. Michael Tory, former Morgan Stanley banker and co-founder of the investor advisory consultancy Ondra, calculates in his research paper Britain plc in Liquidation" that in 1990 UK pension funds owned more than 1tn worth of UK companies; now they hold less than 100bn. Increasingly, they invest in safety-first government bonds or in destinations overseas. It is a de facto investment strike - a wrong-headed attempt to make pension funds so safe they are killing our economy and paradoxically themselves.
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